Geographies

George Serafeim

George Serafeim is a Professor of Business Administration at Harvard Business School. He has taught courses in the MBA, executive education and doctoral programs, and is currently teaching the elective course “Reimagining Capitalism: Business and Big Problems” in the MBA curriculum, which received the Ideas Worth Teaching Award from the Aspen Institute and the Grand Page Prize. He has presented his research in over 60 countries around the world and ranks among the top 20 most popular authors out of over 12,000 business authors on the Social Science Research Network.

Professor Serafeim’s research focuses on measuring, driving and communicating corporate performance and social impact. His work is widely cited and has been published in the most prestigious academic and practitioner journals, such as The Accounting Review, Strategic Management Journal, Journal of Accounting and Economics, Journal of Finance, Organization Science, Journal of Accounting Research, Management Science, and Harvard Business Review. His research is regularly cited in the media, including The New York Times, Bloomberg, Financial Times, The Wall Street Journal, Economist, The Guardian, BBC, Le Monde, El País, Corriere della Sera, Washington Post, and NPR. He has received multiple awards and recognitions for his research on corporate sustainability and sustainable investing, and the Pericles Leadership Award for his services to Greece.

Professor Serafeim has served in several not-for-profit organizations including the board of directors of the High Meadows Institute, the working group of the Coalition for Inclusive Capitalism, and the Standards Council of the Sustainability Accounting Standards Board. He has expertise in professional services firms as the co-founder of KKS Advisors, focusing on integrating material sustainability issues in business strategy and investment decisions. He serves on the steering committee of the Athens Exchange Group focusing on market design for innovation and growth financing. Moreover, he has extensive experience in the investment management industry serving on the advisory board of investment firms that focus on environmental, social and governance (ESG) issues as catalysts for value creation. He was appointed on the first ever decarbonization advisory panel by the New York State Governor and Comptroller to protect the state’s pension fund from climate change risks and identify sustainable opportunities. He has been recognized by Barron's as "one of the most influential people in ESG investing."

Professor Serafeim earned his doctorate in business administration at Harvard Business School, where his dissertation was recognized with the Wyss Award for excellence in doctoral research. He received a master's degree in accounting and finance from the London School of Economics and Political Science, where he was awarded the Emeritus Professors’ Prize for best academic performance. He grew up in Athens, Greece.

Over the past few years, there has been a significant increase in the number of initiatives seeking to mobilize investor voice towards positive social impact. This paper, provides a framework outlining the role of investors as stewards of the commons. Common ownership of competitors within industries and long-time horizons in ownership of shares are key characteristics for investors that could act as stewards of the commons, such as index funds. Social pressure fueled by small socially responsible investment funds and non-profit organizations and customer pressure from individual investors are critical in mitigating free-rider problems among asset managers and sustaining engagement practices.

What is corporate purpose? Does it matter for financial performance? How do you develop one? New research documents that most organizations are struggling to diffuse a sense of purpose throughout the organization. Those that can, enjoy better financial performance.

Using data on approximately 500,000 employees we find that our measure of purpose is not related to financial performance. We document that firms exhibiting both high purpose and clarity have systematically higher future accounting and stock market performance, even after controlling for current performance, and that this relation is driven by the perceptions of middle management and professional staff rather than senior executives.

This technical note explores how advancements in technology are fundamentally transforming how consumers interact with mobility. Transformation is being driven by three trends: the emergence of affordable electric vehicles, the development of autonomous vehicles and the growth of modernized ride sharing. When integrated, these trends create a transportation model which utilizes a fleet of autonomous, electric vehicles which are not privately owned to provide cheaper, safer and "greener" travel to more consumers, more often. The potential economy-wide disruptions caused by this transportation system are enormous. How will car manufacturers adapt when autonomous vehicles increase vehicle utilization and provide greater mobility with a fraction of the number of cars currently on the road? How will oil companies react to falling oil demand caused by the increased adoption of electric vehicles? How will governments deal with large increases in unemployment as autonomous cars replace professional human drivers? Before disruption occurs, corporate leaders must be prepared to usher their organization through a phase of transformational change. Understanding the challenge of change and scenario analysis in environments of transformational change is also the topic of the case ExxonMobil: Business As Usual?

How do we ensure that everyone in society benefits from economic growth? How do we narrow income disparities between the topmost earners and everyone else, such that we create wealth for more people? Some CEOs suggest that our focus needs to shift to long-termism and a more socially focused view of capitalism’s broad objectives. If inclusive capitalism at its core means bringing society and business together, what are the strategies to get us there? At the Aspen Ideas Festival, Professor Serafeim participated in an exciting panel seeking to provide answers to those questions.

Moreover, in a recent Harvard Business Review article Professor Serafeim and co-authors outline a roadmap for companies and investors that seek to create inclusive growth. The four principles are:1. Search for systemic, multisector opportunities to connect local entities into a new value-creating ecosystem2. Mobilize intermediaries and NGOs as complementary partners3. Partner with external funders for seed and scale-up financing4. Implement a measurement and governance system for the new ecosystem

An increasing number of investors use reported environmental, social and governance (ESG) information. In new research we provide insights into why and how investors use ESG data. Relevance to investment performance is the most frequent motivation for use of ESG data followed by client demand and product strategy, bringing change in companies, and then ethical considerations. Important impediments to the use of ESG information are the lack of reporting standards and as a result lack of comparability, reliability, quantifiability and timeliness. Among the different ESG investment styles, negative screening is perceived as the least investment beneficial while full integration into stock valuation and engagement are considered more beneficial but they are all practiced with equal frequency. Current practices of different ESG styles, especially screening, are driven by product and ethical considerations. In contrast, integration is driven by relevance to investment performance. Future practices of ESG styles are driven by relevance to investment performance, bringing change in companies, and concerns about data reliability.

How Companies Can Integrate Sustainability to their Core and Why Investors Should Care

By now most companies have sustainability programs. But a mishmash of sustainability tactics does not add up to a sustainable strategy. To endure, a strategy must address the interests of all stakeholders: investors, employees, customers, and society at large.

Professor's Serafeim reseach has shown the value implications of integrating sustainability in a company's strategy and operations, and what are the distinguishing organizational processes that sustainable organizations have. His work on the financial materiality of sustainability investments was the first one to demonstrate the path to financial value. Relatedly, in his work he has outlined a process that can be used to execute a sustainable strategy and extend the boundaries of The Performance Frontier, and how to implement a strategy to achieve organizational change.

In his line of work on sustainable investing he has documented a market interest in nonfinancial information, how sell-side analysts have shifted their perceptions about the value of sustainability, and how firms with better ESG performance have better access to finance.

How Companies Communicate their Sustainability Efforts and What are the Consequences

An increasing number of companies issue sustainability or integrated reports. It is estimated that now more than 7,000 companies do so. In addition, an increasing number of countries now mandate reporting of ESG information.

In this line of research Professor Serafeim has documented that corruption and bribery bring fewer business benefits than conventional wisdom would suggest, while generating significant costs both at the personal leader and at the business level.

For example, using data on hundreds of companies around the world, a clear picture emerges suggesting that after detection organizations bear significant costs through tarnished reputations, damaged regulatory and business relations, and lower employee morale.

Greece is a country with great potential because of high quality assets due its rich history, culture, geographic location and human capital. At the same time it faces serious management and governance problems. Overcoming these require a change management process.

In 2015, Professor Serafeim was awarded the inaugural Pericles Leadership Award, presented by the Prime Minister, given to individuals who have a track record of outstanding leadership in creating value for the Hellenic Republic through professional management processes, especially building trust and confidence with internationally comparable transparency and accountability.

On 19th of July, 2017 Professor Serafeim rang the closing bell of the Athens Stock Exchange. His remarks on a new strategy for Greece are here.

Professor Serafeim's Harvard Business School case on the measurement, accounting and sustainability of Greece's debt can be found here:Greece's Debt: Sustainable?